A Review of Diversity and Inclusion at America’s Largest Insurance Companies

A Review of Diversity and Inclusion at America’s Largest Insurance Companies

Statement of
Baird Webel
Specialist in Financial Economics
Before
Committee on Financial Services
Subcommittee on Diversity and Inclusion
U.S. House of Representatives
Hearing on
“A Review of Diversity and Inclusion at America’s Largest
Insurance Companies”
September 20, 2022
Congressional Research Service
https://crsreports.congress.gov
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Madam Chairwoman, Ranking Member, and Members of the subcommittee, thank you for the
opportunity to testify before you today. My name is Baird Webel. I am a Specialist in Financial
Economics at the Congressional Research Service (CRS) focusing on nonhealth insurance issues. CRS’s
role is to provide objective, nonpartisan research and analysis to Congress. CRS takes no position on the
desirability of any specific policy or policy outcome. Any arguments presented in my written and oral
testimony are for the purposes of informing Congress, not to advocate for a particular policy outcome.
My testimony today will begin with a brief introduction and overview of statistics on the diversity and
inclusion in insurance employment and conclude with some observations on the legislation announced as
a subject of today’s hearing.
Employment Diversity in Insurance and Overall Labor Markets
The private sector employs roughly 125 million people, with the U.S. Bureau of Labor Statistics (BLS)
collecting a wide variety of statistics about the labor market. According to BLS, approximately 2.8
million people were employed in the insurance industry in 2021.1 Average annual insurance industry
earnings are an estimated $76,840 compared to estimated average total private earnings of $55,397.2 Sub-
industries included in the BLS data include insurance carriers ($82,655) and insurance agencies,
brokerages, and related services ($69,499).3
BLS statistics also include breakdowns by racial and ethnic groups as well as by gender.4 For 2021, those
statistics for the insurance industry included 58.9% women, 77.9% White, 13.2% Black or African
America, 6.4% Asian, and 11.8% Hispanic or Latino, as shown below in Figure 1. Figure 1 also portrays
the same categories for the overall “financial activities” category5 (52.1% women, 78.4% White, 11.3%
Black or African American, 7.5% Asian, and 12.6% Hispanic or Latino) and the total U.S. working
population (47.0% women, 77.5% White, 12.3% Black or African American, 6.6% Asian, and 18.0%
Hispanic or Latino). It should be noted that there is some overlap among racial and ethnic categories, so it
would not be expected that they sum to 100%.

1 BLS, “Current Employment Statistics (CES),” at https://www.bls.gov/ces/data/.
2 CRS calculation using BLS CES data. Average annual earnings were calculated by multiplying the average weekly earnings in
2021 by 52 weeks.
3 BLS, CES. CES industry data is available by North American Industry Classification System (NAICS) code. The categories
used include insurance carriers and related activities (NAICS code 524), insurance carriers (NAICS code 5241), and insurance
agencies, brokerages, and related services (NAICS code 5242).
4 BLS, “18. Employed persons by detailed industry, sex, race, and Hispanic or Latino ethnicity,” at https://www.bls.gov/cps/
cpsaat18.htm.
5 The financial activities category includes banking, securities, non-bank credit, real estate, and leasing services.
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2021
Figure 1. Insurance Industry Gender, Race, and Ethnicity
2021

Source: BLS, https://www.bls.gov/cps/cpsaat18.htm.
Notes: Exact BLS series are “Insurance and related activities,” “Financial activities,” and “Total, 16 years and over.” Race
and ethnic group categories do overlap and would not be expected to sum to 100%.
The financial activities category can be broken down further, including into banking and securities
industries, which roughly parallel the committees’ previous surveys of the largest banks and securities
firms. Figure 2 portrays the comparison of these three industries, while Table 1 combines the data from
Figure 1 and Figure 2 and adds additional financial services occupational categories.
Figure 2. Insurance, Banking, and Securities Gender, Race, and Ethnicity
2021

Source: BLS, https://www.bls.gov/cps/cpsaat18.htm.
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Notes: Exact BLS series are “Insurance and related activities,” “Banking and related activities,” and “Securities,
commodities, funds, trusts, and other financial investments.” Race and ethnic group categories do overlap and would not
be expected to sum to 100%.
Table 1. Financial Industry Gender, Race, and Ethnicity
2021
Black or
African
Hispanic
Industry
Women
White
American
Asian
or Latino
Insurance
58.9%
77.9%
13.2%
6.4%
11.8%
Banking
56.3%
74.4%
12.8%
9.7%
12.6%
Securities
38.2%
77.8%
7.2%
12.3%
7.9%
Credit Unions
69.8%
77.9%
13.6%
5.5%
10.7%
Non-bank Lenders
49.3%
75.9%
10.7%
10.1%
13.2%
Financial Activities
52.1%
78.4%
11.3%
7.5%
12.6%
Total Working
47.0%
77.5%
12.3%
6.6%
18.0%
Population
Source: BLS, https://www.bls.gov/cps/cpsaat18.htm.
Notes: Exact BLS series are “Insurance and related activities,” “Banking and related activities,” and “Securities,
commodities, funds, trusts, and other financial investments,” “Savings institutions, including credit unions,” “Nondepository
credit and related activities,” “Financial activities,” and “Total, 16 years and over.” The financial activities category includes
real estate, and leasing services in addition to the industries detailed in the table. Race and ethnic group categories do
overlap and would not be expected to sum to 100%.
2011-2019
Similar data are available for approximately the last decade. For this time period, however, BLS did not
break out the insurance industry as a separate category.6 In order to generate the following presentation of
2011-2019 data, CRS utilized individual occupation categories that are specific to insurance7 to generate
the “Insurance” category data and the individual figures below compare this composite category to the
BLS-created “Business and Financial Operations Occupations” category for gender, race and ethnicity.

6 BLS also did not publish data on “White” prior to 2017, so this category is omitted.
7 CRS utilized Claims Adjusters, Appraisers, Examiners, and Investigators; Actuaries; Insurance Sales Agents; and Insurance
Claims and Policy Processing Clerks. Each individual year’s BLS data can be found at https://www.bls.gov/cps/aa2011/
cpsaat11.htm, https://www.bls.gov/cps/aa2013/cpsaat11.htm, https://www.bls.gov/cps/aa2015/cpsaat11.htm,
https://www.bls.gov/cps/aa2017/cpsaat11.htm, and https://www.bls.gov/cps/aa2019/cpsaat11.htm.
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Figure 3. Insurance Occupations Diversity over Time: Hispanic or Latino
2011-2019

Source: CRS using data from BLS.
Notes: The “Insurance” figure is a composite of the BLS occupation categories of Claims Adjusters, Appraisers,
Examiners, and Investigators; Actuaries; Insurance Sales Agents; and Insurance Claims and Policy Processing Clerks.
“Business/Finance” is the BLS category Business and Financial Operations Occupations. “Total” is the BLS category “Total,
16 years and over.”
Figure 4. Insurance Occupations Diversity over Time: Asian
2011-2019

Source: CRS using data from BLS.
Notes: The “Insurance” figure is a composite of the BLS occupation categories of Claims Adjusters, Appraisers,
Examiners, and Investigators; Actuaries; Insurance Sales Agents; and Insurance Claims and Policy Processing Clerks.
“Business/Finance” is the BLS category Business and Financial Operations Occupations. “Total” is the BLS category “Total,
16 years and over.”
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Figure 5. Insurance Occupations Diversity over Time: Black or African American
2011-2019

Source: CRS using data from BLS.
Notes: The “Insurance” figure is a composite of the BLS occupation categories of Claims Adjusters, Appraisers,
Examiners, and Investigators; Actuaries; Insurance Sales Agents; and Insurance Claims and Policy Processing Clerks.
“Business/Finance” is the BLS category Business and Financial Operations Occupations. “Total” is the BLS category “Total,
16 years and over.”
Figure 6. Insurance Occupations Diversity over Time: Women
2011-2019

Source: CRS using data from BLS.
Notes: The “Insurance” figure is a composite of the BLS occupation categories of Claims Adjusters, Appraisers,
Examiners, and Investigators; Actuaries; Insurance Sales Agents; and Insurance Claims and Policy Processing Clerks.
“Business/Finance” is the BLS category Business and Financial Operations Occupations. “Total” is the BLS category “Total,
16 years and over.”
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Observations
On average, the BLS data show that the insurance industry pays a higher wage than overall economy-
wide average in the country. Its workforce has a higher percentage of women and Blacks and African
Americans than the general working population, but a lower percentage of Asian Americans and
Hispanics or Latinos. Compared to the banking and securities industries, the comparison is similarly
mixed. It appears that the diversity in the insurance industry has been increasing over time, which is
consistent with anecdotal evidence that the industry is putting particular focus on hiring and employment
of a more diverse workforce.8 These overall data, however, lack detail to make more specific conclusions.
In comparison with the committee’s survey and report,9 particularly lacking are more granular detail as to
the gender, racial and ethnic diversity within the hierarchy of the companies. This does not enable an
analysis of the diversity in leadership or executive positions. Further, the data do not break out data large
insurance companies relative to smaller companies.
Insurance Regulation and Proposed Legislation
Congress endorsed the state-based insurance system in the 1945 McCarran-Ferguson Act.10 Although later
acts, such as the 2002 Terrorism Risk Insurance Act P.L. 111-203 P.L. 111-203P.L. 106-10211 and 2010
Dodd-Frank Wall Street Reform and Consumer Protection Act12 (Dodd-Frank) increased the federal
presence, insurance regulation remains primarily the purview of the states, particularly in nonhealth
insurance. This relative lack of a federal regulatory apparatus can pose some complications when
Congress seeks to exercise authority over the insurance industry. For example, Dodd-Frank specifically
created an Office of Minority and Women Inclusion (OMWI) within a variety of federal entities
overseeing the financial services industry.13 The directors of these offices are charged with, among other
tasks, “assessing the diversity policies and practices of entities regulated by the agency”14 Among the
enumerated federal agencies, however, none of them would be considered to generally regulate insurers.
The only current federal oversight of insurers is of holding companies with insurance operations which
fall under the Federal Reserve15 and this is a relatively small number of companies.16

8 For example, CRS examination of the websites and 2021 SEC 10-4 annual filings for the 27 large insurers surveyed by the
committee found specific sections focused on diversity and inclusion, although there was variation in the lengths of the sections
and detail among insurers.
9 House Committee on Financial Services, Diversity and Inclusion: Holding America’s Largest Insurance Companies
Accountable, September 16, 2022, at https://financialservices.house.gov/uploadedfiles/d.i_insurance_report_092022.pdf.
10 15 U.S.C. §§1011-1015.
11 P.L. 107-297.
12.
13, Section 342; codified at 12 U.S.C. §5452. The statute lists the following agencies: Department of the Treasury; Federal
Deposit Insurance Corporation; Federal Housing Finance Agency; Federal Reserve, including the board and the individual banks;
National Credit Union Administration; Office of the Comptroller of the Currency; Securities and Exchange Commission; and
Consumer Financial Protection Bureau. See 12 U.S.C. §5452(g)(1).
14 12 U.S.C. §5452(b)(2)(C).
15 Holding companies with both depository and insurer subsidiaries are overseen by the Federal Reserve, a framework that dates
back to the Gramm-Leach-Bliley Act (, GLBA). GLBA allowed for holding companies with thrift subsidiaries to be overseen by
the Office of Thrift Supervision, but Dodd-Frank consolidated this authority under the Federal Reserve. The Federal Reserve may
also oversee insurance companies designated for such oversight by the Financial Stability Oversight Council, but no companies
are currently so designated.
16 S&P Global Market Intelligence identifies only six holding companies “significantly engaged in insurance activities” who also
own banks engaged in broad banking activities, with another 11 insurers owning limited-purpose banks. See Tim Zawacki,
“Some insurer-owned banks show outsized growth as rising interest rates await,” S&P Global Market Intelligence, February 16,
2002, at https://www.capitaliq.spglobal.com/web/client?auth=inherit#news/article?id=68817996.
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The draft Minority and Women Inclusion in Insurance Act17 would require the Department of the
Treasury’s Federal Insurance Office (FIO) to survey insurers and report to Congress on diversity in the
insurance industry. The state insurance regulators are to be consulted in this study. Somewhat similarly,
the draft Diversify Insurers’ Workforce Study Act18 would direct FIO to study and report to Congress on
recruitment, retention and attrition in the insurance industry and best practices in this area.
Another bill addressed in this hearing, H.R. 2123, the Diversity and Inclusion Data Accountability and
Transparency Act, would add another mandate to the various OMWIs. Specifically, the bill directs that
each OMWI director “shall require entities with 100 employees or greater regulated by the applicable
agency” to provide information required to carry out the director’s duties. As mentioned above, the
relatively few insurers who fall under federal oversight are overseen by the Federal Reserve. The Federal
Reserve OMWI has indicated that it has sent requests to as many as 1,475 institutions in a given year
requesting self-assessments on diversity and inclusion. These surveys have been conducted since 2017
and the highest response rate to date has been under 13%.19 In 2021, 136 out of 1,178 institutions
responded. The Federal Reserve OMWI identifies responding institutions by charter type (e.g., bank
holding company or savings and loan holding company) at the holding company level, but not by
business type at the subsidiary level. Thus, one cannot identify to what degree the insurers overseen by
the Federal Reserve are, or are not, responding to the Federal Reserve OMWI’s requests.
The other two bills addressed in the hearing, H.R. 1277, the Improving Corporate Governance Through
Diversity Act of 2021, and the draft Diverse Investment Advisers Act both would approach diversity in
insurers not through the insurance regulatory system, but through federal securities laws.20 Federal
securities laws affect far more insurers than direct federal regulation, so this approach arguably would
have a greater impact on the insurance industry. Many insurers, however, are set up as mutual insurers
and do not issue public stock, thus reducing to some degree the impact of federal securities laws. Even
mutual insurers, however, may issue public debt securities and be impacted through these approaches.

17 Available at https://democrats-financialservices.house.gov/UploadedFiles/BILLS-117pih-
MinorityandWomenInclusioninInsuranceAct.pdf.
18 Available at https://democrats-financialservices.house.gov/UploadedFiles/BILLS-117pih-
MinorityandWomenInclusioninInsuranceAct.pdf.
19 CRS calculation using the individual annual reports of the Federal Reserve Office of Minority and Women Inclusion from
2017-2021, available at https://www.federalreserve.gov/publications/minority-women-inclusion.htm.
20 Available at https://democrats-financialservices.house.gov/UploadedFiles/BILLS-117pih-
TheDiverseInvestmentAdvisersAct.pdf.
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Disclaimer
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